Claire McCaskill’s Husband in Hot Water for 2 Complicated Issues

Conservation easements and low-income housing development have landed Joe Shepard, Claire McCaskill’s wealthy husband, in hot water this week.

By NTK Staff | 05.29.2018 @3:00pm

Sen. Claire McCaskill’s (D-MO) staff wants you to know she and her wealthy husband, Joe Shepard, file separate income tax returns. That’s according to the St. Louis Post-Dispatch, and likely because Shepard’s financial dealings are likely going to create headaches for McCaskill’s reelection chances in November.

An aide for the senator acknowledged that three Shepard investments in McCaskill’s latest financial report were conservation easements: Alvion Investments LLC; Cattail Investment; and Wahoo River Investments LLC. All were described as “unimproved land” in the report.

Alvion is listed as an investment valued at between $250,000 and $500,000 (federal financial disclosure forms have wide ranges of disclosure requirements), while the other two are listed as at least $1 million, and could be substantially higher.

As the Post-Dispatch story notes, these easements are known as “the billion-dollar loophole” because “wealthy investors could get four times, or more, in tax breaks larger than the actual investments because of the way the land is assessed” in these types of easements. McCaskill has invested at least $2.25 million in these types of easements, which the IRS is trying to restrict. For her part, McCaskill has largely supported conservation easements, though her staff is eager to point out she voted against a recent spending bill that would have made them permanent.

On a separate front, Shepard’s name has been brought up in a dispute over low-income housing development. Shepard is a long-time low-income housing developer in the St. Louis area, and late last week, embattled Gov. Eric Greitens (R-MO) “requested that a Missouri House investigative committee issue subpoenas to a developer and a banker involved in low-income housing tax credits.”

Asked for comment, a spokesperson for state Attorney General Josh Hawley (R-MO), who is running for the Senate seat currently held by McCaskill, noted that it was curious Shepard’s name was left off the subpoena request. Hawley’s office is investigating potential wrongdoing by Greitens.

At the center of the controversy is Sterling Bank, which is “highly involved in low-income housing tax credits,” according to the Kansas City Star. And it turns out Shepard is involved with Sterling Bank as well:

Public records in Missouri and Georgia show that Sterling Bank is a creditor with several corporate entities associated with Shepard’s businesses. Shepard also has a substantial number of investments in companies connected to James Maddox, another owner of Sterling Bank, according to McCaskill’s personal financial disclosure report.

A spokesman for Shepard’s company, Tony Wyche, said that Shepard hasn’t done any business with Sterling in Missouri in years and very little business with Maddox recently. Wyche said Shepard’s investments in Maddox’s companies are a very small percentage of his overall business.

Though these matters are a bit complicated, the stench of impropriety could be enough to hurt McCaskill’s reelection chances. If these stories are allowed to fester, the incumbent might find herself doing more explaining than campaigning in the next few months.